ROI Calculator
Calculate return on investment (ROI) and profit.
How to use this tool
- Enter investment cost and final value in the fields above.
- Results update instantly as you type — or click Calculate.
- Read your roi and the full breakdown beneath it.
Calculate return on investment (ROI) and profit.
⚠ This tool provides general estimates for education only and is not financial, tax or legal advice. Figures may not reflect your situation — verify with a qualified professional.
Formula
ROI = (Final Value − Investment Cost) ÷ Investment Cost × 100
Profit = Final Value − Investment Cost
ROI (%) = (Gain − Cost) ÷ Cost × 100
How it works
Return on investment (ROI) measures the net gain from an investment as a percentage of its initial cost. This calculator subtracts the original investment cost from the final value to find profit, then divides that profit by the cost and multiplies by 100 to express the result as a percentage. It treats the investment as a single lump sum with a single exit value and does not account for time, taxes, or interim cash flows.
ROI is a simple relative measure useful for comparing investments of different sizes, but it should be interpreted alongside the holding period — the same ROI over one year is far better than over ten years.
Worked example
- Investment cost = $100; Final value = $150
- Profit = $150 − $100 = $50
- ROI = $50 ÷ $100 × 100 = 50%
ROI = 50%; Profit = $50
Common mistakes to avoid
- Using revenue instead of net gain in the numerator — ROI must use (return minus cost), not total revenue, or it overstates the return.
- Ignoring time horizon: an ROI of 50% means very different things over 1 year vs 10 years. Use annualized ROI (or CAGR) for cross-investment comparisons.
- Omitting transaction costs, taxes, and fees from the investment cost, which inflates reported ROI.
Key terms
- ROI (Return on Investment)
- A percentage expressing how much net gain was made relative to the cost of the investment.
- Profit
- The absolute dollar gain: final value minus the original investment cost.
- Investment cost
- The total amount of money originally put into an investment (also called the cost basis).
- Final value
- The total amount received when an investment is sold or matures, including any dividends or distributions reinvested.
Frequently asked questions
- What is a good ROI?
- It depends entirely on the investment type, time horizon, and risk level. The S&P 500 has historically averaged ~10% annual ROI. A "good" ROI for real estate differs from a good ROI for a startup.
- Can ROI be negative?
- Yes — a negative ROI means you lost money. ROI = (Final Value - Cost) / Cost x 100; if Final Value < Cost, the result is negative.
- What is the difference between ROI and CAGR?
- ROI measures total return over any period without regard to duration. CAGR expresses ROI as an annualized rate, allowing fair comparison across investments of different lengths.